MSME
is termed as Micro, Small and Medium Enterprise and also include any other
category of business which falls under. MSME enterprises are becoming a prime
factor for developing countries to grow and helps to improve economic stability,
promoting equitable development for all. The government
of India is also supporting such enterprises by providing various aid such as
subsidies, schemes, and incentives to
promote MSME. For availing such benefit from Central or State government, the
enterprise needs to get registered under MSMED Act. Micro, Small and Medium
enterprise whether a manufacturing or service sector needs to get registered
under MSMED Act. Registration under MSMED is not compulsory, but to avail
benefits for business, one should
register it.
Definitions of Enterprises engaged in
providing services:
· Micro
Enterprise: An enterprise where the
investment does not exceed Rs. 10 Lakhs.
· Small
Enterprise: An enterprise where the
investment is more than Rs.10 Lakhs but does not exceed Rs. 2 Crores.
· Medium
Enterprise: An enterprise where the
investment is more than Rs. 2 Crores but does not exceed Rs. 5 Crores
Definitions of Enterprises
engaged in providing Manufacturing:
· Micro
Enterprise: An enterprise where the
investment does not exceed Rs. 25 Lakhs.
· Small
Enterprise: An enterprise where the
investment is more than Rs. 25Lakhs but does not exceed Rs. 5 Crores.
· Medium
Enterprise: An enterprise where the
investment is more than Rs. 5 Crores but does not exceed Rs. 10 Crores
However,
as per the Press Release of 07the
February, 2018, Section 7 of the Micro, Small and Medium Enterprises
Development (MSMED) Act, 2006 will accordingly be amended to define units
producing goods and rendering services in terms of annual turnover are as
follows:
· A micro enterprise will
be defined as a unit where the annual turnover does not exceed 5 crore rupees;
· A small enterprise will
be defined as a unit where the annual turnover is more than 5 crore rupees but
does not exceed Rs 75 crore;
· A medium enterprise will
be defined as a unit where the annual turnover is more than 75 crore rupees but
does not exceed Rs 250 crore.
· Additionally,
the Central Government may, by notification, vary turnover limits, which shall
not exceed thrice the limits specified in Section 7 of the MSMED Act.
Presently the MSMED classifies the Micro, Small and Medium
Enterprises (MSMEs) on the basis of investment in plant and machinery for
manufacturing units, and investment in equipment for service enterprises.
Who can apply for MSME Registration?
· Proprietorship
firms,
· partnership
firms,
· LLPs,
· Private
Limited Company’s, and
· Public
Limited Companies
When to apply for Registration?
MSME Registration can be
done after the commencement of business.
The date can be a past date but not a future date.
Benefits under MSME Registration?
·
Easy sanction
of bank loans,
·
Lower rates
of interest,
·
Excise
exemption scheme
·
The exemption under Direct Tax Laws,
·
Development
of specialized industrial estates,
·
Tax
subsidies,
·
Power tariff
subsidies and,
·
Capital
investment subsidies,
MSME Registration Process:
Registration Process is divided
into two parts namely Pre-operative and
post-operative.
Registration before setup of
unit: Depending
upon the legal entity of the business whether a sole proprietor or a company,
needs to submit PAN, Aadhar, Register office proof, MOA and AOA in case of
company and other documents demanded by the authority. The Registration
Certificate of MSME is issued for a maximum period of two years from its date
of issue. The certificate is valid until
the commencement of the production or for a period of two years from the date
of issue, whichever is earlier.
Registration after the
commencement of production: Once the entity is registered under MSME, the business gets various
privileges during its post-operation
period. The certificate is not mandatory and it can be applied once the
production process starts.
Conclusion
The
Development of Micro, Small and Medium Enterprise involves various acts and
rules, among which MSMED Act is one of them. After the implementation of the
Act, there have been many changes for the
benefit of Micro, Small and Medium Enterprise in India. It is not compulsory to
register under MSMED for every entity, however,
it is beneficially to get it registered.
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